State to withhold $44 million from Medicaid insurer Iowa Total Care

Jan. 3--Nearly $44 million in state funding will be withheld from an insurance company brought on six months ago to manage Iowa's Medicaid program for issues related to incorrect payments to medical providers and related to the insurance company's record keeping.

Iowa Total Care, which administers health coverage to thousands of Iowans under the state's managed care program, was notified by the Iowa Department of Human Services Friday that the $44 million will be withheld from the company's January capitation payment.

A capitation payment is a set rate paid monthly to the managed-care organizations in Iowa's Medicaid program by the state for the services it provides.

"The Department has worked with Iowa Total Care in good faith to onboard your operations, and has provided ample opportunity for (Iowa Total Care) to correct claims payment issues and encounter data issues," Iowa Medicaid Enterprises Director Michael Randol wrote in a letter to the company's chief executive officer.

"The department takes these issues seriously and intends to use our contractual remedies to ensure proper administration of the program," Randol continued.

DHS announced the penalty Friday, stating the department was "exercising its authority" to hold the managed care organization accountable.

"Once Iowa Total Care resolves the issues identified, the withhold will be released," DHS Spokesman Matt Highland said in a news release.

"However, additional remedies may be sought. DHS will continue to hold managed-care organizations accountable to the Iowans they serve."

Iowa Total Care, a subsidiary of St. Louis, Mo.-based Centene Corp., became one of the administrators for Iowa's Medicaid program on July 1, 2019, replacing UnitedHealthcare.

This is a breaking report. Check back for more information.

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